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Share-Based Compensation
 9 Months Ended
Oct. 27, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-Based Compensation
Share-Based Compensation
We currently grant share-based compensation, including options to purchase shares of our common stock and nonvested stock to employees and outside directors, pursuant to the Kohl’s Corporation 2010 Long-Term Compensation Plan. Annual grants of stock options and nonvested stock are generally made to eligible employees in the first quarter of the fiscal year. Grants to newly-hired and promoted employees and other discretionary grants are made periodically throughout the remainder of the year. Grants of stock options and nonvested stock are generally made to eligible outside directors upon their initial election to the Board of Directors and annually upon each such director’s re-election.
The Black-Scholes option valuation model was used to estimate the fair value of each option award during the first nine months of the respective fiscal year based on the following assumptions:
 
 
2012
 
2011
Dividend yield
2.6%
 
1.8%
Volatility
33.7%
 
33.0%
Risk-free interest rate
1.0%
 
2.1%
Expected life in years
5.5
 
5.5
Weighted average fair value at grant date
$11.84
 
$14.60

The following table summarizes our stock option activity for the first nine months of 2012 and 2011:
 
 
2012
 
2011
 
Shares
 
Weighted
Average
Exercise
Price
 
Shares
 
Weighted
Average
Exercise
Price
 
(Shares in Thousands)
Balance at beginning of year
16,564

 
$
53.41

 
17,869

 
$
53.17

Granted
1,387

 
49.15

 
1,008

 
52.61

Exercised
(1,218
)
 
40.17

 
(1,098
)
 
43.20

Forfeited/expired
(832
)
 
60.80

 
(854
)
 
62.27

Balance at end of quarter
15,901

 
$
53.66

 
16,925

 
$
53.32


The following table summarizes our nonvested stock activity for the first nine months of 2012 and 2011:
 
 
2012
 
2011
 
Shares
 
Weighted
Average
Grant
Date Fair
Value
 
Shares
 
Weighted
Average
Grant
Date Fair
Value
 
(Shares in Thousands)
Balance at beginning of year
1,946

 
$
51.11

 
1,116

 
$
49.30

Granted
1,001

 
49.00

 
1,175

 
52.35

Vested
(482
)
 
49.89

 
(283
)
 
49.61

Forfeited
(149
)
 
49.93

 
(37
)
 
51.35

Balance at end of quarter
2,316

 
$
50.53

 
1,971

 
$
51.04

Share-based compensation expense for both stock options and nonvested stock awards totaled $13 million for the three months ended October 27, 2012, $14 million for the three months ended October 29, 2011, $37 million for the nine months ended October 27, 2012 and $43 million for the nine months ended October 29, 2011. At October 27, 2012, we had approximately $169 million of unrecognized share-based compensation expense (before forfeitures and capitalization), which is expected to be recognized over a weighted average period of 3.4 years.